HB227, the Clergy Act, creates a limited window for certain clergy members and related religious workers who previously claimed an exemption from Social Security coverage to revoke that exemption. The bill applies to duly ordained, commissioned, or licensed ministers, members of religious orders, and Christian Science practitioners whose exemption is in effect for the taxable year in which the bill is enacted. It allows them to file a revocation application by the due date of the federal income tax return for their second taxable year beginning after December 31, 2028, with the revocation taking effect either for the first or second taxable year after that date, depending on the election made.
The bill also addresses tax consequences for late-filed revocations by requiring payment of the self-employment taxes that would have been due for the relevant year if the exemption had not applied. Once a revocation is made, the individual may not later reapply for the clergy exemption. The bill further directs the IRS, in consultation with the Social Security Administration, to submit a plan within 90 days of enactment to inform eligible clergy and religious practitioners about their ability to revoke a prior exemption.
In practical terms, the bill would amend how section 1402(e) of the Internal Revenue Code operates for clergy and similar religious workers, and it would affect the application of chapter 2 self-employment tax rules and title II Social Security benefit eligibility. It does not broadly change Social Security coverage for all clergy; rather, it creates a one-time opportunity for those who previously opted out to opt back in under specified timing and filing rules. The bill was passed by the House and then referred to the Senate Committee on Finance.
The overall sentiment appears strongly favorable. The House vote was overwhelmingly in support, 348 yeas to 5 nays, suggesting broad bipartisan acceptance of giving clergy a path to rejoin Social Security coverage if they choose. No committee transcript was provided, so there is no recorded debate in the supplied materials, but the vote margin indicates little visible opposition at the House stage.
Any contention likely centers on the policy choice to reopen an exemption that is normally treated as binding and on the administrative complexity of implementing a delayed revocation window. Potential concerns may include the tax and benefit consequences for affected clergy, the requirement to pay back taxes in some cases, and the IRS/Social Security Administration’s need to notify eligible individuals and administer the new election process. The Senate referral to the Finance Committee suggests further review of tax and Social Security implications.
Impact
HB227 would amend federal tax law by creating a special revocation period for clergy and certain religious practitioners who previously elected exemption from Social Security coverage under Internal Revenue Code section 1402(e). It would also affect the operation of self-employment tax rules and Social Security benefit eligibility under title II of the Social Security Act for those who revoke the exemption, while requiring IRS outreach planning in coordination with the Social Security Administration.
Sentiment
The bill appears to have broad support, reflected in the House’s 348-5 vote to pass it under suspension of the rules. The available record shows no committee transcript or detailed floor debate, but the decisive vote suggests the measure was viewed favorably as a targeted, technical change benefiting clergy who want to participate in Social Security.
Contention
The main points of contention are likely the policy and administrative implications of allowing clergy to reverse a prior exemption that is ordinarily permanent, and the requirement that late revocations be accompanied by payment of taxes that would have been due. Some may also question whether the IRS and Social Security Administration can effectively notify eligible individuals and manage the new election process, though no specific objections are included in the provided materials.
Permits local governments to extend the existing clergy residential property tax exemption to include clergy residing in co-ops; clarifies that the clergy property tax exemption shall not affect eligibility for certain other tax abatements.
Permits local governments to extend the existing clergy residential property tax exemption to include clergy residing in co-ops; clarifies that the clergy property tax exemption shall not affect eligibility for certain other tax abatements.